EURUSD – Up
Event to pay attention to today:
21:00 EET. USD – FOMC Rate Decision
EURUSD:
The euro’s bullish momentum dissipated on Tuesday, with the pair retreating below 1.0500 as traders focused on the anticipation of the Federal Reserve’s (Fed) latest rate meeting in 2024. With European data relatively scarce this week, traders have had to focus on the significant data set from the US.
Despite the release of positive European PMI data for December, euro markets largely ignored numerous speeches from European Central Bank (ECB) officials earlier in the week. The EU services PMI data remains in negative territory due to fears of a deepening economic slowdown in Europe, which continues to worry investors and businesses.
US retail sales data rose to 0.7% m/m, prompting some investors to question whether the Fed should pursue an aggressive rate-cutting strategy, particularly in light of recent inflation figures. Despite this, markets are still pricing in the possibility of a third consecutive Fed rate cut on Wednesday, with 95% probability pointing towards a 25bps rate cut, according to CME’s FedWatch tool.
Trading recommendation: We follow the level of 1.0500, when fixing above it we consider Buy positions, when rebounding we consider Sell positions.
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